Recent years have seen a number of efforts to extend the shareholder franchise. These efforts implicate two fundamental issues for corporation law. First, why do shareholders—and only shareholders—have voting rights? Second, why are the voting rights of shareholders so limited? This Article proposes answers for those questions. As for efforts to expand the limited shareholder voting rights currently provided by corporation law, the Article argues that the director primacy-based system of U.S. corporate governance has served investors and society well. This record of success occurred not in spite of the separation of ownership and control, but because of that separation. Before making further changes to the system of corporate law that has worked well for generations, it would be prudent to give those changes already made time to work their way through the system. To the extent additional change or reform is thought desirable, it should be in the nature of minor modifications to the newly adopted rules designed to enhance their performance rather than radical and unprecedented shifts in the system of corporate governance that has existed for decades.

* Professor, UCLA School of Law. With permission of the publisher, portions of this essay were adapted from Chapters 5 and 10 of my text Corporation Law And Economics (2002).